sale & purchase agremeent fornnax

COPYRIGHT© 2015 by Fornnax Technology Pvt Ltd -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- B-908, Titanium Square, Thaltej Cross Road, Ahmedabad – 380054, Phone: +91-79-65224455/77

E-mail: [email protected], Web: www.fornnax.com

SALE AND PURCHASE AGREEMENT

BETWEEN M/s. __________________

AND

M/s. Fornnax Technology Pvt Ltd

THIS SALE AND PURCHASE AGREEMENT is agreed and signed on 11th Day of December, 2013 between______________________ India (hereinafter "First Party")

and FORNNAX TECHNOLOGY PVT LTD, Company incorporated under the Companies Act, 1956, bearing CIN No. __________________B-908, Titanium

Square, Thaltej Cross Road, Ahmedabad-380054, Gujarat, India. (Hereinafter "Second Party”).

RECITALS:

WHEREAS, Second Party is in the business of selling and servicing "WASTE TYRE RECYCLING PLANT" equipment; and WHEREAS, First Party agrees to purchase such equipment. NOW, THEREFORE, Therefore, in consideration of the mutual promises, terms, covenants, and conditions set forth herein and the performance of each, it is hereby agreed as follows:

CHAPTER 1. GENERAL RULES

Article 1. Basic Principle First Party and Second Party have executed this Contract in good faith in accordance with mutual trust and spirit of cooperation.

Article 2. Range of Application As far as there is no special contract in writing, this Contract shall apply to all Products transaction contracts (hereinafter referred to as Individual Contract).

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Article 3. Effective: This Contract is effective from the date of signature by the both the parties, until termination or fulfilling the purpose of this contract, whichever is earlier, in context and within the terms and conditions mentioned in this contract.

Article 4. Individual Contract 1. The Individual Contract shall be concluded when First Party places order to Second

Party based on an order sheet and Second Party accepts the order. 2. First Party shall put down the Products name, quantity, unit price, money amount,

delivery time and place of delivery in the above-mentioned order sheet or any documents, which belong to the order sheet.

Article 5. Amendment of Individual Contract 1. Both the parties shall agree mutually to any amedmenet to this Contract if any, in

writing before the delivery of the order to carry our any amendment to this contract. However, in no case the order will be termed as cancelled as otherwise specifically provided in this Contract.

CHAPTER 2. TRANSACTION

Paragraph 1. Products Specification and Price

Article 6. Specification 1. The specification of the Products delivered by Second Party to First Party shall conform

to First Party’s designation mentioned hereafter. a. First Party shall prepare drawings, specification sheets, standards and corresponding

documents and lend those documents (hereinafter referred to as Loaned Drawings) to Second Party;

b. First Party may approve drawings and specification sheets (hereinafter referred to as Approved Drawings) prepared by Second Party.

2. In case of doubt and or unclear matters with regard to the above-mentioned Loaned Drawings, Approved Drawings etc or First Party’s designation, Second Party shall immediately bring forward the matter to First Party, and Second Party shall receive instructions from First Party.

3. First Party may upon necessity revise the specification of the Products.



4. In case Second Party revises the Approved Drawings, Second Party shall have First Party’s prior approval and shall keep the revision history.

Article 7. Price 1. The price of the Products shall be fixed in the Individual Contract after consultation

between First Party and Second Party, and the concerned price, as far as not specifically described in the Individual Contract, shall conclude the packing cost, freight charges, insurance charges incurred by Second Party until the Products is delivered to prescribed location.

2. When Second Party is requested by First Party to offer a quotation sheet or quotation detail sheet, Second Party shall immediately provide the concerned documents to First Party.

3. For the purpose of this Contract, the Price is fixed at Rs. __________, Excluding Taxes.

Paragraph 2. Delivery

Article 8. Delivery 1. Second Party shall deliver the Products, which have passed qualified inspections done by

Second Party, at the prescribed place of delivery, according to the prescribed delivery time and delivery method.

2. When carrying out the above-mentioned delivery, Second Party shall attach the prescribed documents of the delivered Products as well as an Inspection Result Sheet.

3. In every month, First Party shall calculate the demand of Products through Material Requirement Planning (MRP) process and shall immediately issue and inform Purchase Order as well as the Forecast Order to the Second Party which time shall be fixed upon mutual consultation between the parties hereto.

Article 9. Change of Delivery Time 1. When there is a risk of delay in the delivery according to Second Party’s judgment,

Second Party shall immediately bring forward the reason of delay and the expected revised delivery date to First Party and shall receive instructions form First party to that effect.

2. When the delay in delivery may cause loss to First Party, for which Second Party is responsible, Second Party shall compensate the loss to First Party based on mutual consultation.

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3. In case of advance in delivery, except First Party’s request, Second Party shall have First Party’s prior approval.

Article 10. Delivered Quantity Second Party shall not deliver a quantity of Products, which is different from the prescribed quantity on order sheet, without First Party’s prior approval. When the quantity is less than the prescribed quantity, due to a reason which is acceptable by First Party, Second Party shall deliver the remaining quantity at First Party’s prescribed delivery time. When the shortage of quantity is caused by an unacceptable reason and causes loss to First Party, Second Party shall compensate the loss to First Party based on mutual consultation.

Article 11. Receipt of Products 1. When the formal delivery meets the stipulations in Article 8, First Party shall

immediately receive the Products and surrender a document certifying such receipt to Second Party.

2. In case the delivered Products are not in conformity with the stipulations in Article 8, Second Party shall immediately withdraw the Products according to First Party’s notice. First Party, however, may, upon Second Party’s request, keep the Products. In such case, First party shall not be responsible for any loss incurred, such as loss of Products, damage of Products, reduced quantity, change in quality etc., the cause of which is not attributable to First Party.

Paragraph 3. Inspection

Article 12. Receiving Inspection 1. First Party shall without delay carry out Receiving Inspection to the received Products

according to the Inspection Method decided by First Party and shall accept the Products which are judged as qualified by First Party.

2. In case First Party, during the Receiving Inspection, discovers disqualified Products, First Party shall notify Second Party the content of such disqualification.

Article 13. Treatment in Case Disqualification Upon receipt of the notification mentioned in point 2 of Article 12, Second Party shall immediately repair the Products or deliver substitute Products in the manner decided by First Party.



Article 14. Exceptional Use When any of the Products, which is disqualified through Receiving Inspection, is subject to exceptional use, First Party may accept such Products after allowing price discount, which will be fixed upon mutual consultation between the parties hereto.

Article 15. Transfer of Ownership 1. The ownership of the delivered Products and the risk attached to the Products shall be

transferred from Second Party to First Party at the same time the acceptance of inspection mentioned in Article 12 and 14 is completed. However, in case First party includes Supply Parts to the Products, the ownership shall be stipulated in Article 23.

2. In the event that the Receiving Inspection, as mentioned in Article 12 and 14, is done by First Party at Second Party’s premises, Second Party shall keep the Products with the care of good manner until delivery is completed to the prescribed place according to First Party’s instructions.

Article 16. Withdrawal of Disqualified Goods 1. Second Party shall withdraw the disqualified Products, except the Products for

exceptional use stipulated in Article 14, within 1 (one) week since the day notice mentioned in point 2 of Article 12 is received. First Party, however, may dispose of the disqualified Products containing Supply Parts supplied by First Party, as mentioned in Article 21, according to the procedures fixed by First Party.

2. First Party may, after confirming Second Party, dispose of the disqualified Products, which are not withdrawn by Second Party for more than 1 (one) month after the notice mentioned in point 2 of Articles 12

Paragraph 4. Payment

Article 17. Payment First Party shall pay the price of the Products, which have been received by First Party, in the manner and on the date to be mutually agreed by First Party and Second Party, as may be described in the order sheet issued by First Party or billing documents issued by Second Party. Payment Schedule and Method has to be entered here.

Article 18. Offsetting 1. Concerning the payment mentioned in Article 17, when First Party has a money claim

that should be received from Second Party, such as the price of Supply Parts that is



supplied with charge, machine rental fee etc., First Party may offset the payment with such claim on the prescribed date.

2. When carrying out an offset mentioned in the point 1 of Article 18, First Party shall notify Second Party by sending detailed statement or bill.

Paragraph 5. Quality Assurance

Article 19. Quality Assurance 1. Second Party shall assure that all Products delivered to First Party shall have the quality,

which fulfills the Product Specification described in Article 5. 2. Second Party shall bear the responsibility to repair, substitute, or compensate the loss

caused by non-conforming and or defective Products, discovered on or after the Receiving Inspection done by First Party.

3. All matters pertaining to Quality Assurance shall follow the Quality Assurance Agreement, which is entered into and signed by the parties hereto, and hereby made an inseparable part hereof.

4. In the event of non-conformity and or conflict between the terms and or conditions of the Contract and the Quality Assurance Agreement, First Party and Second Party shall amend and or make necessary adjustment to the relevant term and or condition based on mutual consultation.

Paragraph 6. Sub-Contracting

Article 20. Sub-Contracting 1. Second Party may sub contract the production process of the Products, entirely or

partially, to a third party after obtaining First Party’s prior approval. 2. In case Second Party assigns a sub-contractor, Second Party shall let the concerned sub-

contractor thoroughly understand and observe the term and condition of the Contract. Second Party shall not escape from all responsibilities to First Party with regard to the act and behavior of the sub-contractor.

Paragraph 7. Supply Parts

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Article 21. Supply Parts First Party may, after consultation with Second Party, supply basic materials, parts, half-finished goods, assemblies etc. (hereinafter referred to as Supply Parts) to be used in the production process of the Products, with charge or free of charge, according to the procedure to be fixed by First Party, in the cases which come under the items mentioned here below.

a. When the Supply Parts are necessary to maintain the quality, characteristic and standard of the Products;

b. When so requested by Second Party to First Party; c. When other appropriate reasons exist.

Article 22. Inspection of Supply Parts 1. Upon receiving the Supply Parts, Second Party shall without delay inspect the Supply

Parts and when Second Party discovers defects or shortage of quantity, Second Party shall immediately notify First Party and receive First Party’s instructions. The same case shall apply when hidden defects of the Supply Parts are discovered during the production process.

2. Second Party shall be responsible for damages or losses occurred to the Products and or Supply Parts because of non-observance of point 1 of Article 22 and or the causes attributable to Second Party.

Article 23. Ownership of the Supply Parts 1. The ownership of the free of charge Supply Parts as well as the ownership of the

Products in process, half-finished Products and or the Products produced or processed by Second Party using such Supply Parts, shall remain in First ..Party’s hand.

2. First Party shall keep the ownership of the Supply Parts received with charge by Second Party from First Party as well as the ownership of the Products in process, half-finished Products, and the Products produced or processed by Second Party using such Supply Parts, until Second Party completes the payment of the prices of such Supply Parts.

Article 24. Management of the Supply Parts 1. Second Party shall manage the Supply Parts with the care of good manager and shall use

the Supply Parts only for producing the Products. 2. Second Party shall handle scraps and chips of the free of charge Supply Parts, according

to First Party’s instructions. 3. In case a situation may occur in which First Party’s ownership may be violated, or risk of

the occurrence of such situation like seizure of the Supply Parts by a third party and other treatment, Second Party shall prove that the Supply Parts belong to First Party and shall also notify First Party to that effect and shall follow First Party’s instructions.



4. First Party may inspect the condition and management of the Supply Parts at Second Party’s work-site.

Article 25. Damage and Quality Deterioration of Supply Parts In case of loss, damage, deterioration or change in quality of the Supply Parts, after the Supply Parts are received by Second Party, the causes of which are not attributable to First Party, Second Party shall compensate the incurred loss to First Party based on mutual consultation.

Paragraph 8. Jigs, Dies, Machines etc. Article 26. Disposal of Jigs or Dies In case Second Party wishes to dispose or transfer the jigs or dies, which are possessed and used by Second Party in the production process of the Products, Second Party shall bring forward the matter to First Party beforehand, and shall take care that it shall not hinder the production process of the Products. Article 27. Lending of Jigs or Dies Whenever deemed necessary, First Party may lend jigs and or dies to Second Party, for the use in the production process of the Products, which matter shall be concluded in a separate agreement between the parties hereto. Article 28. Lending of Machines First Party may, as occasion demands or upon request of Second Party, lend machines and or equipment to be used in the production process of the Products, which matter shall be concluded in a separate agreement between the parties hereto.

CHAPTER 3. GENERAL MATTERS Article 29. Mutual Cooperation 1. Second Party shall, in order to improve the price, quality, function and method of

production process of the Products, positively develop new technology, propose improvement and present information to First Party.

2. If necessary, First Party may, upon Second Party’s knowledge, enter Second Party’s work site and provide guidance and advice with regard to improvement of the technology, quality control, delivery control of the Products, and Safety Management/Control. When receiving a request from First Party to carry out every kind of inspection, Second Party shall positively cooperate to fulfill the request.

3. In regard to establish long term and stable business relationship, both parties shall not only implement this Agreement in good faith but also realize that compliance is

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important business factor. Both parties should establish compliance structure to prevent all misconducts effect badly to both parties such as violation of law or social norms and other illegal practice.

4. Second Party shall not only comply with related environment laws and or regulations but shall make effort to reduce waste, save energy and resources, and recycles.

Article 30. Preservation of Secrecy Either party hereto shall strictly keep the secrecy of the other party, with regard to the business and or technology obtained through both parties’ knowledge based on the transactions stipulated in this Contract, and shall never disclose those confidential matters to any third party, during the period of this Contract as well as after this Contract is expired. Any breach or omission on part of the First Party in contrary to the terms and conditions of this Contract subject to breach of Secrecy or confidentiality affecting the rights of the Second Party will lead to litigation and will be termed as a breach of Contract resulting into legal consequences. Article 31. Prohibition to Sell to Any Third Party Second Party shall not sell the Products or any goods which are similar to the Products to any third party, unless Second Party has obtained First Party’s written approval. Article 32. Industrial Proprietary Right 1. When an invention has been made by Second Party, Second Party shall immediately

inform First Party to that effect. Application and possession of the Industrial Proprietary Right based on the above intention shall be decided upon both parties’ consultation.

2. In case dispute may arise concerning the Industrial Proprietary Right related to the Products with a third party upon reasons which are not attributable to First Party, Second Party shall handle and solve this matter upon Second Party’s sole responsibility and shall cause no harm or trouble to First Party.

Article 33. Prohibition of Transferring Right and Obligation Except approved in writing by Second Party, First Party shall not transfer or pledge all claims to and or accept liabilities from any third party, which originate from this Contract as well as the Individual Contract. This also prohibits the use of the product for Academic Purpose with a purpose defeating the business of the Second Party. Hence, the equipement sold should be used for Commercial Purpose only and not for the purpose of designing, modification or any method which in turn results into the situation at present or in future affecting the business of the Second Party at any point of time, even after the expiration of this Contract. Any breach or omission to this effect will result into legal consequences attracting penalties, or find or both. Article 34. Obligation to Notify

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When one of the under-mentioned cases occurs or when there is a risk of such occurrence, Second Party shall immediately notify First Party to that effect.

a. The change of address of Second Party’s office and or production facility, the change of Second Party’s authorized representative, the change of Second Party’s trade name, the change of Second Party’s organization related to this Contract;

b. Alienation or taking over a joint operation, entrustment or acceptance of a business, capital increase or capital decrease;

c. Other important matters related to this Contract. Article 35. The Term of Validity 1. The term of validity of this Contract shall be 2 (two) years since the date set forth. If at

least 3 (three) months prior to the expiration of the Contract, none of the parties hereto proposes in writing for an amendment or cancellation, the term of validity of the Contract shall continue for a successive 1 (one) year with the same terms and conditions.

2. Even when this Contract terminates, the provisions of the Contract still apply to the Individual Contract, which have been concluded prior to the termination.

3. Either party hereto may terminate the Contract before its expiration date, by sending notification to the other party at least 3 (three) months prior to the termination, upon the reasons acceptable for the parties hereto.

Article 36. Cancellation of Contract 1. Both Parties may, without notice, cancel this Contract as well as the Individual

Contract, entirely or partially, in one of the cases which comes under the followings : a. any Party violates the provision of this Contract and or its amendments or the

Individual Contract; b. any Party, without justifiable reasons, does not perform or is anticipated not to

perform its obligation provided for in this Contract; c. When a disaster occurs or due to other unavoidable reasons, it is difficult for Second

Party to perform its obligation provided for in this Contract; d. When the competent authorities have decided that Second Party should cease or

suspend its business; e. When Second Party stops payment or dishonors payment at a clearinghouse; f. When there is a claim for bankruptcy, reconciliation, arrangement and corporate

reorganization process put to Second Party or when reasons to such proceedings may arise;

g. When Second Party makes a decision as to liquidation or when there is an important change with respect to the management system like joint venture etc.;

h. When there are appropriate reasons for First Party to judge that there is a risk that one of the above-mentioned cases may occur.



2. When First Party terminates the Contract according to the provision in point 1 of Article 36, First Party shall instruct Second Party as how to handle the Products, Products in process, half-finished Products etc., and Second Party shall comply with those instructions.

3. When the Contract is terminated according to the provision in point 1 of Article 36, First Party may demand for compensation of loss, resulting from such termination of the Contract, from Second Party.

Article 37. Accomplishment of Obligation Upon Termination of Contract When the Contract is terminated or cancelled because of whatever reason, the debts of each party shall automatically become due and shall immediately be paid to the other party. When it is requested so by First Party, Second Party shall immediately accomplish the production and deliver the Products, which have been ordered based on Individual Contract by First Party to Second Party. Article 38. Treatment when the Contract Expires 1. Irrespective of the reason, when this Contract expires or is terminated, Second Party

shall immediately return the goods mentioned in the following aligns to First Party. However, goods, which are necessary to perform the existing Individual Contract, shall be immediately returned after these goods are no longer used. a. The Loaned Drawings lent by First Party to Second Party; b. The Supply Parts which First Party has supplied to Second Party free of charge, and

or the Supply Parts which is supplied with charge but not yet paid by Second Party to First Party, and or the Supply Parts which have not been processed, and or the remaining of such Supply Parts;

c. Properties of First Party borrowed or kept in custody by Second Party. 2. Second Party shall keep the goods mentioned in point 1 of Article 38 with the care of

good manager, until those goods are returned to First Party. 3. First Party shall instruct treatment of the goods, work in process, half completed goods,

and others which are kept by Second Party. Article 39. Treatment of the Goods when not returned In case Second Party does not return the goods mentioned in point 1 of Article 38, or in case, according to First Party’s judgment, Second Party is unable to return the goods or unable to observe First Party’s instructions mentioned in point 2 of Article 38, First Party may demand Second Party to pay an appropriate amount of money as compensation for the loss. Article 40. Calculation Standard of the Compensation for the Loss The calculation standard of the loss amount of Supply Parts mentioned in Article 38 and 39 shall be as follow : For Supply Parts, which are supplied free of charge, the standard shall be the cost of procuring the parts and materials and the processing cost incurred by First Party.



For Supply Parts, which are supplied with charge but not yet paid by Second Party to First Party, the standard shall be the price of the Supply Parts at the time of supply. Article 41. Treatment of Jig and Dies 1. Irrespective of the reason, when this Contract expires, First Party may propose to take

over all or portion of the jig and or dies used in the production process of the Products, possessed by Second Party or its sub-contractors. In such case Second Party shall immediately deliver the jigs and or dies to First Party.

2. The transfer price of the jigs and or dies mentioned in point 1 of Article 41 shall be based on the price of the concerned jigs and or dies at the time of transfer, taking into consideration the depreciation, and shall be fixed upon mutual consultation.

Article 42. Handling of the Old Contracts 1. The Agreement/Contract concluded by the parties hereto prior to the date of this

Contract, and its amendments and addendums, if any, shall be superseded by this Contract and shall become ineffective as of the date set forth.

2. The Individual Contract, received by Second Party prior to the effective date of this Contract, shall observe the terms and conditions of this Contract.

Article 43. Consultation In case of matters that are not appropriately stipulated or have not been stipulated in this Contract, or when doubt may arise with regard to this Contract, the parties hereto shall settle it through mutual consultation. Article 44. Formal Provisions for Application:

1. Compliance with Laws. Company shall perform this Agreement in compliance with all applicable State, and local laws, rules, regulations, and ordinances, and represents that it shall have obtained all licenses and permits required by law to engage in the activities necessary to perform its obligations under this Agreement. Seocnd Party hereby represents and warrants that all Equipment to be provided to First Party hereunder has received (certified engineer of Gujarat government) clearance and/or approval, and that copies of the clearance/approval documentation issued to Second Party by the (Certified engineer) will be provided to First Party upon First party’s request.

2. Arbitration: If at any time any question, dispute or difference whatsoever shall arise between the Buyer and the Company upon or in relation to or in connection with the contract either of party may forthwith give to the other notice in writing of the



existence of such question, dispute or difference and the same shall be referred to the adjudication to the sole arbitration as mutual agreed and decided by both the parties, as per the terms and conditions of the applicable laws, including the Arbitration and Conciliation Act, 1995. The seat for Arbitration would be Ahmedabad.

3. Applicable Laws and Jurisdiction: This Agreement shall be governed by the laws of the State/Country (excepting any conflict of laws or provisions which would serve to defeat application of State/Country substantive law). Each of the parties to this Agreement hereby irrevocably and unconditionally: (i) consents to submit to the exclusive jurisdiction of the courts of Gujarat State for any proceeding arising in connection with this Agreement and each such party agrees not to commence any such proceeding except in such courts, and (ii) waives any objection to the laying of venue of any such proceeding in the courts of Gujarat State.

As an evidence of the conclusion of this Contract, 2 (two) copies of the text are made with adequate stamp duties, each party shall keep one copy of which after writing their signatures on the texts. First Party Second Party __________________

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sale & purchase agremeent fornnax

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